EVALUATION CHARACTERISTICS OF THE STATE OF DEVELOPMENT OF CREDIT UNIONS IN UKRAINE

Abstract

World experience shows that credit unions are an important component of the financial and credit systems of market economies. Historically, in their modern form, credit unions emerged in the mid-nineteenth century as financial institutions that provided deposit and credit services to small and medium-sized farms. Later, in the process of their evolutionary development, they expanded the scope of their activities and began to provide small loans and related financial services to individuals and small businesses that were uninteresting to banking institutions. The development of credit unions in Ukraine began at the same time as Ukraine gained political independence, and was based on the already existing system of credit cooperation in Ukraine, which required financial resources but did not have wide access to bank loans. The rapid development of credit unions led to the fact that at the end of 2008, 829 credit unions were registered in the State Register of Financial Institutions of the National Commission for State Regulation of Financial Services Markets. However, the global financial crisis has led to a sharp decline in the number of credit unions in Ukraine, and this process continues to this day. Along with the decrease in the number of credit unions, other quantitative indicators of their activity began to decrease, in particular the number of credit union members, the total amount of assets, the capital of credit unions, the income received, and so on. However, quantitative indicators per credit union and one credit union member show that after a sharp decline, immediately after the global financial crisis, they stabilized and became more stable, i.e. periods of decline were accompanied by periods of growth, and some indicators showed positive dynamics. This primarily concerned the amount of capital per credit union and one member of a credit union. Such dynamics of quantitative indicators per one credit union and per one member of the credit union, in our opinion, indicates that as a result of the crisis in Ukraine’s economy, which were provoked by the global financial crisis, the credit union sector was cleansed of financially weak ones with risky credit policy, and those credit unions that violated the basic principles of the cooperative movement. Their unprofessional activities in the financial services market have caused significant damage to both the cooperative movement in general and credit unions in particular. However, as a result of their bankruptcy, only financially stable, reliable credit unions remained on the market, which will become the basis for the development of the cooperative movement in Ukraine.